Mortgage Pre-approval Tips – The Good
While the mortgage pre-approval procedure isn’t difficult, it is crucial. You’ll most likely receive a favourable rate on your mortgage if you follow these few recommendations.
1. Apply First
The majority of Canadians believe that the first step in purchasing a home is to contact a real estate agent and begin viewing properties. This is wrong. The initial thing you should do is apply for a mortgage pre-approval. After all, if you discover a house you enjoy, you’ll want to make a decision quickly. Being pre-approved for a loan eliminates an unnecessary step from the procedure.
2. Search all over for the Best Mortgage Pre-approval Rate
You’ll find several properties before you decide on the one, so shop around for the best mortgage rate. Expect to receive a good deal from your local bank branch only if you do your homework and compare mortgage rates. Use a mortgage broker who will negotiate for you instead of just going to your local bank branch and expecting to get a great deal.
What happens after your mortgage pre-approval is pending? Your offered rate will be kept for you for 90 to 120 days, during which time you will generally be able to accept or reject it. This is when you should start looking for a place to live!
3. Gather Your Documents
It might take time to gather the paperwork needed for a mortgage pre-approval and application; it’s better to get started sooner rather than later. Inquire with your mortgage broker about what documents are necessary to finalize your loan, and begin gathering them in one location.
Here’s a basic list of a few things you will likely need:
- ID
- Statements for your bank account and investments
- Asset proof
- Income proof
- Debt information
4. Stay in Touch with your Broker
Contact your mortgage broker as soon as possible if you need to verify or correct any of the documents. This means staying accessible in case your mortgage broker has any questions about your paperwork. They may come to the incorrect conclusion if you aren’t accessible, and they could reject your mortgage pre-approval. If you’re looking for an excellent broker, call Asim Ali Mortgage Team.
Mortgage Pre-approval Tips – The Bad
Good intentions may lead to ruin, but so do silly mistakes. Here are four guidelines that, if followed, will assist you in obtaining pre-approval.
1. Don’t get a Mortgage Pre-approved in Excess of Your budget
Don’t set your maximum purchase price for the top of your mortgage pre-approval. Make your own estimates based on how much you can afford every month, not just the mortgage payments.
2. Don’t Make Other Major Purchases
After you’ve submitted your paperwork to your loan officer, your financial status shouldn’t alter from pre-approval to loan closing. Even if you were previously pre-approved, changes in your finances might lead to loan rejection. To avoid being rejected, don’t make any significant purchases that alter your debt servicing ratios significantly.
3. Avoid New Credit Applications
It’s also a poor idea to apply for new kinds of credit, such as a personal loan or credit card, and to co-sign a friend or family member’s loan. Your debt level and available credit are both considered during mortgage approval, so increasing them might jeopardize your pre-approval.
4. Avoid Quitting or Switching Jobs
Finally, try to avoid making any changes in your employment status once you’ve been pre-approved. Most mortgage applications require a certain amount of income. Changing jobs or becoming self-employed may cause the application to be delayed or rejected. If at all possible, wait until after you obtain possession of your new residence before switching employers or launching a company. You can learn more about how to deal with changing jobs while house-hunting without risking your pre-approval if you have an offer that’s just too good to refuse.